Consumer protection laws are federal and state statutes and regulations designed to safeguard individuals from unfair, deceptive, or abusive business practices. In financial services, these laws govern advertising, disclosures, product suitability, privacy, complaint handling, and anti-discrimination standards. Examples include state unfair trade practices acts, NAIC model regulations, the Truth in Lending Act, and various insurance and securities rules. Consumer protection laws aim to ensure that clients receive clear information, are not misled by sales practices, and have avenues for redress if harmed by misconduct or negligence in the sale of insurance and investment products.

Advisors interact with consumer protection laws through firm compliance policies on disclosure, advertising review, suitability documentation, and complaint resolution. Carriers and broker-dealers interpret these laws and issue guidelines that affect how illustrations are presented, how replacements are documented, and what language can be used in marketing materials. Regulators rely on consumer protection laws when conducting market-conduct exams or investigating complaints. Understanding consumer protection laws helps advisors appreciate why compliance procedures are strict and how following them protects both clients and the advisorTMs practice over the long term.